SAP Production Planning is one of key module in ERP and deals with planning processes like capacity planning and material planning and execution of production order, bill of material and goods movement. SAP PP module handles master data that is required for BOMs activity, work center and routing and keep it in a separate component.

In SAP PP module, organization structure defined the location of manufacturing plants and storage locations within the plant. At the top you have company and company code and then each company code contains different plant and storage locations.

Bill of material master data is related to material requirement planning and provides the list of components to produce the product.

To produce a product with different variants, you can create super Bills of Material that has list of components to manufacture different variants of a product and selection of component depends on details mentioned in planning order.

When a Bill of Material is created for a material is known as a material BOM in the SAP. Material BOMs are mainly used to represent the structure of products manufactured within your company.

Sales order BOM

Sales Order BOM is used when you specially tailor the make-to-order production of products as per requirements of the customers. To meet the customer requirements, you make sales order specific modifications to various assemblies.

Routine defines the list of activities to be performed for production process. Routing defines sequence of activities performed at work center. Routing plays in important role in calculating production cost, machine time and labor time.

This is planning strategy where stock is produced without sales order. It is used to meet customer demands in future.

When you use Planning strategy 10, only PIR quantity is considered for MRP run and sales order are completely ignored. In this PIR requirement type LSF and is reduced when you deliver stock to customer.

When you use Planning strategy 40, for MRP run maximum of 2 PIR and Sales order can be considered and PIR is reduced when enter the Sales order. PIR requirement type is VSF in this case.

Make to Order planning strategy

In this planning strategy, finish products are not produced until you receive sales order from a customer. For MRP run, you only consider Sales order.

In MTO strategy, you only produce sales order stock and products are delivered as per sales orders from specific customer.

You use Planning strategy 20 for make to order MTO process and planning strategy 25 is used to produce product variants when there is request for variant products from customer.

MRP run or planning run is an engine which is used to fill demand and supply gap. Issues & Receipts are called MRP Elements. Issues include PIRs, Dependent Requirements, Order Reservations, Sales Orders, Issuing Stock Transfer Orders, etc. and receipts include Production Orders, Purchase Requisitions, Purchase Orders, Open Production Orders, Receiving Stock Transfer Order, Schedule lines, etc.

A Production order is used to define the material to be produced, plant location where production has to be done, date and time of production, quantity of goods required. A Production Order also defines which components and sequence of operations are to be used and how the order costs are to be settled.

BOM and routing data of the materials are copied into the production order which determines the list of components and operational data in the order.

Capacity Planning is done to balance the load at work center and you can calculate production capacity based on requirement of product as per available capacity.

Capacity leveling is performed for performing detailed production planning purpose. This is done through planning table which is used to carry detailed planning of capacity requirements over time in future.

In SAP PP, goods issue is done when raw material is consumed to produce material as per Production order. When goods are issued, system decreases the inventory of components at the storage location in Production Planning system.

MD04 is used for Stock / Requirement list this is dynamic list which reflects even any small change is made in Master Data, Planned Order & Production order etc. for respective material for which you have executed stock / requirement list.

MD05 is used to view MRP list which displays results of last MRP run for the material for which you have executed MRP list.

SAP PP-PI provides an integrated planning tool for batch-oriented process manufacturing and is used in pharmaceutical, food and chemical industry to support planning of production, waste disposal in the plant.

SAP Quality Management is part of SAP R/3 system and is integrated with other SAP modules like SAP Material Management MM, Production Planning PP and Plant Maintenance. QM is integral part of logistic management and is used to perform quality functions at incoming material, in process manufacturing process and raw material as well in the facility.